Cailian Press, April 19 (Editor: Shi Zhengcheng) — To combat tax evasion by wealthy Koreans registering luxury cars under company names, the South Korean government has introduced a new measure this year: new cars costing over 80 million Korean won (approximately 420,000 RMB) and registered under company names must now sport a newly introduced fluorescent green license plate.
This policy has had a dramatic impact—the luxury brands that Koreans have always favored are suddenly struggling to find buyers.
Bentley sales plummet by 70%
Issued by the Korean Ministry of Land, Infrastructure, and Transport, this rule took effect in 2024. The government states that this move prevents business owners and their relatives from registering their personal luxury cars under company names, thereby listing the purchase and maintenance costs as business expenses, which allows them to enjoy luxury cars while paying less tax.
Therefore, starting from January this year, any company-registered vehicle purchased for over 80 million Korean won is issued a conspicuous green license plate.
(License Plate Example, Source: Ministry of Land, Infrastructure and Transport of South Korea)
According to the Korea Automobile Importers and Distributors Association, a significant number of luxury vehicles sold last year in South Korea were registered under company names, with more than half of such registrations. As the economy shows limited improvement this year and faces the "green license plate" reform, many luxury car sales have notably plummeted.
As reported by The Korea Times, citing recent data, new registrations of Bentley cars for January through March this year fell by 77% compared to the same period in 2023. Rolls-Royce registrations decreased by 35%, Porsche by 23%, and Lamborghini by 22%.
In 2023, 90% of new Lamborghini registrations in South Korea were under company names, with Rolls-Royce, Bentley, and Porsche also showing high percentages at 87.3%, 76%, and 61.1%, respectively.
Association data also reveals that in March this year, South Korea imported a total of 25,263 vehicles, with only 28% registered under company names, marking the first time this figure has fallen below 30%. Last year, nearly 40% of imported cars were registered under company names.
The data also shows a clear downward trend in luxury car sales starting this year. In 2023, South Korea sold a total of 26,700 vehicles priced over $100,000, a number that tripled from 2019.
Significant psychological pressure
Regarding the impact of the "change in license plate color," the head of the Jeonbuk Institute of Automotive Convergence Technology, Lee Hang-Koo, explained to the media that South Korea is an important market for luxury car brands, but they now face challenges in boosting sales here due to the new regulations, which are surely a headache.
Lee anticipates that considering the potential negative attention from green license plates, the sales of luxury cars in Korea might further slow down.
Lee stated, "When people see supercars with green license plates at entertainment and shopping venues, they will definitely frown."
An official from a luxury car manufacturer mentioned that generally, few customers or business owners are willing to purchase vehicles with green license plates, as they historically associate green plates with rental vehicles in South Korea. Such associations could dampen the overall sentiment of business owners purchasing luxury cars for company use.
A Porsche dealer in Seoul's Gangnam district revealed that there was a batch of customers who purchased in advance before the new regulations took effect at the end of last year. However, generally, Korean customers prefer purchasing luxury cars under company names. Although dealers are now offering discounts on some models, the current economic downturn has not improved sales.
